Thousands of people who overstayed their visit at Diamond Parking lots
in Seattle and throughout the state, and then were tardy paying their
fines, may be entitled to refunds.

The parking-lot company has
agreed, in a preliminary settlement of a class-action lawsuit filed in
U.S. District Court last year, to refund hundreds of thousands of dollars
in "collection fees" it tacked on to 57,000 fines.

Those who received tickets
at Diamond Parking lots in the past four years  that is, tickets
still contestable under the statute of limitations  are being sent
letters informing them of the lawsuit brought by Michelle Hansen of Seattle,
said her attorney Harish Bharti.

In the preliminary agreement,
Diamond Parking said it will pay $2.2 million in refunds and attorneys
fees, said Bharti. The case will go before U.S. District Judge Thomas
Zilly on Jan. 15 for final approval.

James Stoetzer, attorney for Diamond Parking, which has been in business
since 1922 and operates hundreds of parking lots in Washington, could
not be reached for comment last night.

Bharti said that when drivers fail to pay or don't pay enough for parking
at a Diamond lot, they are given a ticket, usually $25 in the Seattle
area. If the ticket isn't paid within 15 days, the company sends a "delinquency"
letter, asking for the original fine plus a collection fee, usually $30,
bringing the total to $55, court documents said.

"In the state of Washington, it's illegal to collect any collection
fee," said Bharti. "It's totally illegal."

State law requires that additional
fees imposed by collection agencies must be "expressly authorized
by statute," court documents said.

"This I'm proud of because
it doesn't cost a single dime for a customer. And they can be sitting
on their couch and still receive a refund," said Bharti.

More than 50,000 people who
paid a questionable "collection fee" after failing to pay for
using a Diamond Parking lot will be eligible for a refund under a settlement
reached in a U.S. District Court lawsuit.

Attorneys in the class-action
lawsuit say the refunds will total about $2.2 million, to be paid by Drico
Recovery Services of Seattle, Diamond Parking's collection agency.

The agency was illegally slapping
errant parkers with a fee of up to $30 between October 23, 1997, and May
31 of this year, the lawyers said.

"It's totally against
the law to charge these fees, but they've been doing it for years and
years," said attorney Harish Bharti. Along with lawyers Tyler Weaver
and Steve Berman, Bharti sued Diamond and Drico.

An attorney for Diamond said
he could not comment on the settlement, which won't be final until a January
hearing before Judge Thomas Zilly.

Jim Stoetzer, a lawyer for
Drico, said company officials were unavailable yesterday and declined
to comment. Officials of Drico and Diamond maintain they did nothing wrong,
according to court documents.

Diamond Parking issues tickets
for motorists who fail to stuff money in the paybox slot at its lots.

Inspectors routinely check
the lots and leave a $25 ticket for people who appear to be breaking the
rules.

According to the lawsuit, tickets
unpaid after 15 days were sent to Drico, which tacked on a fee of up to
$30 and wrote letters demanding payment.

That's what happened to plaintiff
Michelle Hansen, Bharti said.

She parked her car in a Diamond
lot on Seattle's West Mercer Street in April 2001 and didn't have $6 cash
to pay until she came back to her car.

Bharti said his client ended
up with a $25 ticket and later a letter demanding $55.

He contends that Washington
law doesn't allow collection agencies to impose such a "collection
fee" in most circumstances.

Hansen's suit, filed last October,
alleges that each letter seeking a collection fee constitutes an act of
mail fraud and racketeering.

It contends that Diamond and
Drico violated the state Consumer Protection Act and federal debt-collection
laws.

Though Diamond has more than
900 locations in eight states and Canada, the settlement affects only
people who were hit with collection fees in Washington.

Notices were mailed Friday
to people who appeared to be eligible for a refund. They must fill out
and return a claim form.

Hansen's attorneys say some
people paid the collection fee more than once and estimate that roughly
56,000 to 57,000 people are affected.

Before refunds are made, the
judge must approve the settlement as fair and determine the amount of
attorneys' fees, which would reduce the refunds by up to 15 percent.

Bharti and Hansen have a similar
case pending against Ticket Track Inc., accusing the company of seeking
collection fees for numerous other parking-lot companies in Washington.

SETTLEMENT

Amount: $2.2 million, to be
paid by Diamond Parking's collection agency
To: More than 50,000 parkers who paid up to a $30 additional penalty between
Oct. 23, 1997, and May 31, 2002

Next: Judge's approval, attorneys'
fees pending

P-I reporter Tracy Johnson can be reached at 206-467-5942 or tracyjohnson@seattlepi.com.